Chefs' Warehouse acquired the Chicago company for $20 million plus $9.9 million in debt and future payouts.

MeatPoultry.com,
12/12/2013

by By Bryan Salvage

CHICAGO – Allen Brothers, one of the last independent premium steak companies in the US, was recently sold to The Chefs' Warehouse Inc., a Connecticut-based food distributor. According to The Chicago Tribune, Chef’s Warehouse acquired Allen Brothers for $20 million plus $9.9 million in debt and future payouts to be made for hitting certain performance goals.

Financing for the Allen Brothers’ acquisition was accomplished with cash The Chefs’ Warehouse raised from a stock offering it completed in September. The company said it plans to sell more products direct to consumers through the online-sales platform that Allen Brothers built. Allen Brothers is expected to have $80 to $85 million in sales this year, according to a news release issued by Chef’s Warehouse.
Allen Bros. offers Prime beef, both dry- and wet-aged, as well as Wagyu beef. Other products include premium pork, veal, lamb, poultry, wild game, seafood, as well as burgers, hot dogs, heat-and-serve entrées, appetizers and even desserts. Servicing major steakhouses, hotels, country clubs and more, Allen Brothers concentrates primarily on the white table cloth restaurant segment. “Beef is our main protein and our biggest category. Within beef, filet is our No.-1 seller,” Todd Hatoff, president, CEO and fourth generation of the company’s founding family, told Meat&Poultry magazine last year in an exclusive interview following the death of his father, Bobby Hatoff, Allen Bros. chairman, in October.
Todd Hatoff said in a statement that Allen Brothers is thrilled to join The Chefs' Warehouse team. “Having a partner like Chefs' Warehouse will only enhance our opportunities to continue building our brand, as well as provide a terrific future for our employees and customers,” he added. Allen Brothers’ management team, including Hatoff, will be retained, a Chefs’ Warehouse spokeswoman said.

Chefs’ Warehouse is a publicly traded distributor of specialty food products. Most of its customers are independent restaurants and fine-dining establishments on the East and West coasts. Until its acquisition of Allen Brothers, the company had little presence in the Midwest outside of Ohio. The company, which had revenues of $480.3 million in 2012, has been growing through acquisition.
Allen Brothers is “the Rolls Royce” of steak-cutters, Dr. James Marsden, Kansas State Univ. Regent’s Distinguished Professor of Food Safety and Security, associate director of the Biosecurity Research Institute located at KSU and senior science advisor for the North American Meat Association, told Meat&Poultry last year. Marsden has worked with Allen Brothers on various projects over the years.
“There is nothing like the products they produce,” he says. “Other steak companies buy Allen Brothers products to use as their target standard. Their meat-cutters are like artists. Nobody does it better. Look at their catalog and you will see what I mean.”

Allen Brothers operates three facilities in Chicago and employs more than 100 people. It also maintains robust mail order sales. The Thanksgiving-Christmas Holidays are the busiest time of the year for the company and Father’s Day is the second-busiest. The company’s main 35,000 sq. ft. facility is located one floor below corporate headquarters in the heart of the former Chicago Stockyards. All steaks are hand-cut at this facility.

Hatoff proudly described his meat business last year as artisan, requiring talented, knowledgeable meat-cutters. It takes three years of on-the-job training before an Allen Brothers meat-cutter becomes a full-line butcher.